Proteostasis Stock at Bottom of Nasdaq After Drug Data, Downgrade

Early data for PTI's cystic fibrosis treatment disappointed analysts

Managing Editor
Jun 7, 2018 at 10:16 AM
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Proteostasis Therapeutics Inc (NASDAQ:PTI) has fallen to the bottom of the Nasdaq this morning, down 35% to trade at $3.19, after early stage data for the company's cystic fibrosis treatment disappointed analysts -- specifically, its inability to improve lung function. In response, RBC downgraded PTI stock to "sector perform" from "outperform," while more than halving its price target to $5 from $11. 

Looking closer at the charts, PTI stock hit an annual high of $8.61 back in March, before gapping lower in the wake of a scathing short seller report. The security spent the next few months churning in the $4.50--$5.50 range. However, the shares are now on track for their biggest single-session loss since October 2016, and their first close below the 200-day moving average since early March. 

There is ample room for additional downgrades and/or price-target cuts to come down the pike, which could provide more headwinds for the equity. The majority of the brokerages covering the security still rate it a "buy" or "strong buy," and its average 12-month price target of $13.75 is now nearly quadruple PTI's current perch. 

A number of short sellers are likely kicking rocks today. Short interest topped out at a record 3.19 million shares in mid-March, but has since dropped 40% to 1.88 million shares. Nevertheless, this still represents a healthy 13% of PTI's total available float. Short sellers are sitting on the bench today, though, with PTI stock currently on the short-sale restricted list.

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